Greece Political and Economic Problem, and Ways of Solution

Presented by: Mohamed Atef Mahmoud 9104657Presented to: Dr. Bassem Roushdy

Outline

• What is the Greek Financial Crisis ??• Political Problems Led to the Crisis• Economic Problems Led to the Crisis• The Crisis’ Effect on Europe• Ways of Solution

What is the Greek Financial Crisis ??

• The Greek Financial Crisis happened around the beginning of 2010. It happened as a consequence of the global economic downturn struck.

• Increasing the public debt with high rate• The Budget Deficit has reached more than 14 %• National debt was about €300 billion

Political Problems led to the crisis

• Years of unrestrained spending, cheap lending and failure to implement financial reforms under the lead of the New Democratic Party left Greece badly exposed when the global economic downturn struck.

• Inability of the government to borrow from the market as it will have to pay high interest rates to the investors due to their worry of payback ability.

Economic Problems led to the crisis

• Greece had economic problems before joining the Eurozone.

• Controlling the public expenses.• Joining the Eurozone encourages Greece for more

problems!• Inability of the national banks to borrow due to the

lessen of their debentures’ value

The Crisis’ effect on Europe

• Greece is already in major breach of euro zone rules on deficit management and with the financial markets betting the country will default on its debts, this reflects badly on the credibility of the euro.

Ways of Solution

• the government has has implemented austerity measures aimed at reducing the deficit by more than €10 billion.

• It has increased taxes on fuel, tobacco and alcohol, imposed public sector pay cuts and applied tough new tax evasion regulations.

• The governmental austerity measures led people to make several strikes and protests

Ways of Solution

• Led by Angela Merkel, the euro zone with the IMF have agreed a rescue plan for their ailing neighbour.

• First Rescue Package (May 2010 – June 2011)• Second Rescue Package (February 2012)

Thank You